Forward search outlier detection in data envelopment analysis

In this paper we tackle the problem of outlier detection in data envelopment analysis (DEA). We propose a procedure where we merge the super-efficiency DEA and the forward search. Since DEA provides efficiency scores which are not parameters to fit the model to the data, we introduce a distance, to be monitored along the search. This distance is obtained through the integration of a regression model and the super-efficiency DEA. We simulate a Cobb–Douglas production function and we compare the super-efficiency DEA and the forward search analysis in both uncontaminated and contaminated settings. For inference about outliers, we exploit envelopes obtained through Monte Carlo simulations.